Gaule: Give us an introduction to the foundation, when it was formed and who is behind its formation.
Hopkins: Alacrity Foundation has come out of a company called the Wesley Clover Corporation, which was founded by telecoms entrepreneur Sir Terry Matthews. The CEO is Simon Gibson. They were the driving force behind creating the foundation. The basic idea is: how do we continue to innovate, to seize on new technologies and to drive startups and new companies. This start up model of spinning companies out and doing start ups was something Sir Terry has been doing successfully for many years. So we set up Alacrity Foundation in Newport, south Wales, as a way to standardise that and make that into a programme which can be successful for many years to come.
Gaule: What is different from other incubator models and why is this different from investing in start ups and new products and technologies?
Hopkins: We take recent graduates and put them into a one-year programme, and feed into that programme what we call demand-driven ideas. So these are ideas or problems sourced from our corporate partners. – issues they are facing. So instead of our startup teams coming up with their own idea and trying to sell it to the market place, we are taking ideas where we know there is a real demonstrated problem. We have a fairly good standard funding model. We fund these graduate students for a year in a programme in which we provide mentoring, guidance and leadership as well as technical training. And then at the end of that year, if we have a product, a path to revenue and a customer then those students graduate and we form a new start up entity. We have a seed investment fund that invests £250,000 (£420,000) into that startup and allows it to blossom from there.
Gaule: Can Newport and the other Alacrity centres compete or be different from Silicon Valley or Silicon Roundabout – London’s Tech City?
Hopkins: Clearly there is a very vibrant startup scene in California as well as in Shoreditch in London, fuelled by cloud-based software. We believe we need to recreate a vibrant technology market across the UK and there is no need to overrotate on London. Wales is a great place. The ease and the low cost of cloud-based software start ups at innovation level is tremendous and there is absolutely no reason why that cannot be done elsewhere. So we are getting that started in Newport. We have a great concept. We have six teams currently in incubation and two to three that will be graduating in the next month or so, and we expect to have three more teams joining us this summer. We have a strong flow of ideas and it is close to other technology companies. We also have a sister location foundation in British Columbia, Canada, based in Vancouver and Victoria. There is a vibrant start up scene there and we are able to contribute to that quite broadly. We are looking for others. This also brings up the bigger point of disparity. Recently I was speaking with the CEO of a UK tech company who was doing an initial public offering roadshow, and in the UK he could get two to three-times revenue valuation but in the US he could get six-times, rising to 10-times quickly if initial numbers were hit. Clearly there is a real disparity in valuation and that is something in the UK we need to work on. We need more tech champions created in the UK, need to work on building better tech companies and we also need the analysts and the financial community to understand the tech companies and give better valuations for those. We think over time that will improve.
Gaule: What key business areas do organisations need to address and what technologies will be affecting these?
Hopkins: The corporates come to us because they want to build or accelerate innovation. They want to liberate some of the ideas in their companies that they cannot quite get out or funded. We are looking at some very interesting areas right now, including employee engagement and learning, digital marketing and sales, productivity and smart systems.
Gaule: What types of technology are driving those things?
Hopkins: Clearly cloud and software services are driving that. Mobile and machine-to-machine – internet of things – are key. And then there are all kinds of new software, methodologies, predictive analytics and near-field communication. We are leveraging all sorts of new areas for our start ups to be successful.
Gaule: Give us some examples of ventures in the portfolio.
Hopkins: We have a couple of start ups that are about to leave the programme. In particular we have one company called Vouch specialising in providing voucher fulfilment and e-ticketing systems for large resorts and luxury destinations. They have very good traction with two or three customers already and we are looking to launch them in a month or so. We are also building a company, Learnium, which is in the social learning space in a Facebook style, working with universities as well as corporates to allow and facilitate peer-to-peer learning. We are also working in tele health [healthcare delivered over the phone], predictive analytics, and a company that is creating welfare-to-work software using the latest in psychometrics.
Gaule: With whom in a corporate organisation can you interact best?
Hopkins: Typically we engage with those that are responsible for corporate venturing or innovation. But in reality it is the creative, frustrated entrepreneur that is the best entry point. Therefore doing it outside or with an incubator makes sense.
Gaule: What are your other interests?
Hopkins: I divide it into the usual and the unusual. The usual stuff – slow running, bad golf and suspect skiing; the unusual – leading a regeneration project with a difference by starting an Anglican church in my town.
Hopkins spoke at one of the Corven Networks Corporate Venturing Senior Executive Forum sessions and we are planning a corporate venturing workshop at Celtic Manor and Alacrity in Wales later in 2014 to explore business model and technology changes. For further details contact Andrew Gaule.
You can get free previous audios of Gaule’s Question Time at the iTunes store – search Corven Group – and as audio downloads from Global Corporate Venturing or from www.corven.com/corven-networks.
To contact Andrew Gaule and for future interview ideas email andrew.gaule@corven.com and tlewis@globalcorporateventuring.com